Should I?

[GotHP]

I'm new to the car wash world and learning. I'm A business owner now but different field. I'm looking at a tunnel wash that's in bad shape(interior and equipment) but is making money.
Its A 120 tunnel full service with A 2 year old 60 ft express less than a mile away.
Avg 630-700 gross for the last 5-10 years. Income was 150 or so. now the wash is making less around 550 and profiting 80.
No changes in 20+ years!
I would install A DBR pos system.Now there is just a register and a compuwash now. I was thing of trying to give A show and doing simioniz lava package. Remodel lobby and install new plastic walls in the tunnel.
How much would you pay?
Should I pass?

 

[robert roman]

I would pay “very little” for this property. Reasons are age of equipment (no changes), outdated technology and more importantly history of declining revenues and profits.

Also consider the person(s) who “may” stay on to help transition ownership are the ones who presided over the financial decline of this business.

Most bank loan officers would find this equation does not compute for new-to-industry from different field.

So, unless there is seller financing, you may be forced to pass.

 

[rph9168]

Probably one of the more difficult tasks in our industry is to make a winner out of a loser. For the situation you have described it would almost be worse than starting from scratch. Since I believe you would have to invest heavily to turn this around unless you can get this dirt cheap I would pass. I almost agree that there are probably few in any lenders that would touch this property with a ten foot pole so you would need to find some form of alternate financing like the owner carrying it or finding a partner unless you could cash it out.

 

[GotHP]

Thank you for your input. What would a good price on something like this. Business only no land. This would also be a cash purchase.
The only reason I'm still interested so far is that with the old equipment they still have so many customers. Just skeptical about the turnaround in bringing the business back. my second year plan would be to start putting in some new McNeil equipment. The exterior of the building is brick and looks great.

 

[GotHP]

I would not be able to start A car wash tunnel from ground up. I do like A challenge it keeps me interested but I don't want to throw money away either.

 

[BBE]

I obviously do not have all the facts, but I would definitely not feel comfortable making that kind of investment without owning the land.

 

[rph9168]

From my experience I would not buy a wash without the land either. Seems like a cheap way to go in the beginning but eventually you are paying to improve someone else's property.

 

[dafadoorrr]

I would install A DBR pos system.Now there is just a register and a compuwash now. I was thing of trying to give A show and doing simioniz lava package. Remodel lobby and install new plastic walls in the tunnel.

 

[Waxman]

No land= no deal.

Take all your cash and invest in something better and easier. Find a higher and better use for the cash, esp since you know so little and there is no land to invest in.

PASS